Contingencies are Safeguards for the Buyer
A contingency is a stated event that must occur before a contract is binding. There can be many contingencies in a contract (sales agreement) to buy a house, but the two most common are the Financing and Inspection Contingencies.
The Financing Contingency allows you cancel the contract if you cannot obtain a mortgage. You generally need to be somewhat specific about the mortgage you will obtain and agree to apply for the mortgage within a certain time frame. This contingency is meant to protect the buyer in-case financing can't be found. This also allows the buyer some protection if, for whatever reason, the loan fails to fund at the last minute at escrow.
The Inspection Contingency gives you the right to have the home inspected, within a certain time period, after your offer is accepted by the seller. You can withdraw from the contract if the inspection reveals problems with the house and you and seller cannot come to agreement on how to take care of these problems.
Both these contingencies are standard provisions of the sales agreement commonly used by Realtors® in the Portland Metropolitan area and are for the benefit of the buyer.
Wayne B. Pruner is a Realtor® at Oregon First, who works in the Portland and Tigard, Oregon area. He is ready to help you with all your real estate needs. His phone number is 503-891-0795. Here are links to his real estate website and his real estate blog.
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